On Thursday, May 20, the U.S. Treasury Department said it has proposed a global minimum corporate tax rate of at least 15% after meeting with officials from other countries as part of international tax negotiations.
The 15% rate would be considered a “floor,” and Treasury suggested discussions continue to be ambitious and push the rate higher. There is currently no global minimum tax rate.
President Biden has proposed raising the U.S. corporate tax rate from 21% to 28% and has called for increasing a U.S. minimum tax on multinationals' foreign earnings to 21%. Critics argue that they will make the U.S. less competitive compared to other countries that have recently cut their corporate rates.
Treasury Secretary Janet Yellen has said that establishing a global minimum tax rate could help to end a "race to the bottom" on corporate taxes and help ensure countries are able to raise sufficient revenue to provide public services. Learn more.